Exclusive Networks (EXN) H2 2023 earnings summary

Executive summary

• Record FY 2023 performance: gross sales €5.145bn, up 14% reported and 16% at constant currency; adjusted EBIT rose 21% to €186m.

• Growth exceeded FY 2023 targets, with €254m adjusted operating FCF and net debt/adjusted EBITDA leverage of 0.8x.

Financial highlights

• Gross sales were €5.145bn, up 14% reported and 16% at constant currency; organic growth was 15% at constant currency.

• Net margin rose 14% to €468m; adjusted EBIT increased 21% to €186m and adjusted net income rose 8% to €108m.

• IFRS revenue under revised accounting treatment was €1.559bn, up 6%; IFRS net income was €45m versus €39m, and EPS was €0.47 versus €0.40.

• Adjusted EBITDA was €199m versus €167m in FY 2022; software was 49% of gross sales, support and maintenance 26%, and cloud-based business 32%.

• Growth drivers included existing vendors in current geographies (+13.9%), vendor expansion (+0.5%), pricing (+1.2%) and acquisitions (+0.8%); currency effect was -2.7%.

Outlook and guidance

• FY 2024 targets: gross sales growth of 10%–12% at constant currency, net margin of €500m–€515m and adjusted EBIT of €200m–€210m.

• FY 2024 adjusted operating FCF target is above 80% of adjusted EBITDA, with further performance improvement expected.

• A soft first half is anticipated amid macro volatility and competitive pressures.